Proposed energy sector reforms criticised by suppliers lobby group

A new proposal from the Australian Securities & Investments Commission (ASIC) aimed at reforming the electricity sector has been met with firm opposition from electricity suppliers.

The ASIC proposal, which was submitted in May, suggests reforming the financial requirements for electricity derivative market participants.

The ASIC recommends "introducing a requirement for longer cash flow projections for electricity derivative market participants" as well as amending "the current financial requirements to impose an NTA requirement on electricity derivative market participants, including holding a portion of this NTA in cash or cash equivalents."

However the Australian is reporting that electricity suppliers, retailers and power stations have delivered a joint submission to the ASIC in stark criticism to the reforms.

This lobby group believes that the proposed changes could potentially drive up the cost of electricity while also increasing risk and stifling competition.

"This could deter new entrants and reduce competition in the market, which would have a detrimental impact on all consumers," reads the submission, according to the Australian in an article published today (July 10).

The energy market is currently in a volatile state, with the recent carbon tax forcing many suppliers to increase electricity prices by upwards of 20 per cent in a move that has impacted many small businesses and households.